(CMA adapted)

*P9-12 (LO7) (Conventional and Dollar-Value LIFO Retail) As of January 1, 2017, Aristotle Inc. adopted the retail method of accounting for its merchandise inventory.

To prepare the stores financial statements at June 30, 2017, you obtain the following data.

	Cost	Selling Price
Inventory, January 1	$ 30,000	$ 43,000
Markdowns		10,500
Markups		9,200
Markdown cancellations		6,500
Markup cancellations		3,200
Purchases	104,800	155,000
Sales revenue		154,000
Purchase returns	2,800	4,000
Sales returns and allowances		8,000

Instructions

(a) Prepare a schedule to compute Aristotles June 30, 2017, inventory under the conventional retail method of accounting for inventories.

(b) Without prejudice to your solution to part (a), assume that you computed the June 30, 2017, inventory to be $59,400 at retail and the ratio of cost to retail to be 70%. The general price level has increased from 100 at January 1, 2017, to 108 at June 30, 2017. Prepare a schedule to compute the June 30, 2017, inventory at the June 30 price level under the dollarvalue LIFO retail method.